Public acquisition offers 13.9% premium over closing price, aiming to enhance long-term growth by transitioning to non-listed status
Han & Company (Han & Co), a leading domestic private equity fund (PEF) management company, has acquired the management rights of SK D&D (SK D&D), a comprehensive real estate development company.
Han & Co announced on the 1st through a public disclosure that it had signed a stock purchase agreement to acquire all shares (31.27% stake) held by SK Discovery, the co-controlling shareholder of SK D&D, at 12,750 Korean won per share. The transaction amount is approximately 74.2 billion Korean won.
Han & Co also stated that it plans to pursue a voluntary delisting by publicly acquiring all remaining listed shares. The purchase price per share will be the same as the price paid to SK Discovery, the largest shareholder, at 12,750 Korean won. This effectively provides the same management premium to minority shareholders.
The public acquisition price is higher than SK D&D's 52-week highest price as of the day before the announcement. Compared to the previous day's closing price, it reflects a 13.9% premium, and compared to the average stock prices over the past 1, 3, 6, and 12 months, it reflects premiums of 24.4%, 26.4%, 32.8%, and 46.3%, respectively.
The public acquisition will take place from today until the 29th of this month. The settlement date for the public acquisition is the 31st. All shares tendered in the public acquisition will be purchased, and the payment will be made in cash. The scheduled completion date for the stock purchase agreement with SK Discovery is one month after the earlier of either the date SK D&D is delisted or six months after the contract date, or as otherwise agreed by the parties.
Previously, Han & Co invested in SK D&D in 2018 and jointly managed the company with SK Discovery as co-controlling shareholders. However, recognizing that SK D&D's real estate development business, which requires quarterly disclosures and involves public investors, is not well-suited for a listed company, Han & Co decided to pursue delisting to maximize the company's growth potential.
According to Han & Co, real estate development companies typically invest large amounts of capital and secure loans at the outset, with projects spanning long periods involving permits, product composition, construction, cost management, sales, and tenant acquisition. Revenue is usually recognized only upon project completion. If projects deviate from the original plan, losses may occur, and additional funding might be required. This inherent risk makes it difficult to maintain stable performance and reflect the company's intrinsic value in its stock price.
A Han & Co representative stated, "Over the past seven years of joint management with SK D&D, we have accumulated expertise and understanding of the real estate development business. Going forward, we will strive to maximize the long-term corporate value of SK D&D by transitioning it into a non-listed company."